Crude awakening

O&G catches up with First Crude Oil’s Jan Strom to dig a little deeper into the latest industry trends.

“We have focused on solid and reliable equipment that meets all international standards and with the functionality required by the oil and gas industry”
-Jan Strom

Capital expenditure of oil and gas companies, after surging from 2007 to 2008, witnessed a significant decrease in 2009. How will your company adapt to these changes?
Jan Strom. Together with our partners, Subsea Norway AS, Jotne E&P AS and First Crude Engineering Inc., we have met these new demands by designing low cost and low weight subsea manifolds to reduce the overall project cost. And it is not only material cost but also developing installation friendly subsea structures that are easy to install and retrieve by ordinary installation vessels. This has been completed without reducing material quality or designing equipment that can easily break.

We have focused on solid and reliable equipment that meets all international standards and with the functionality required by the oil and gas industry. Basically, we made a whole new concept, starting with P&ID's to see what was needed with regards to functionality and cutting down on all "nice to haves". The oil and gas companies are asking for equipment to recover hydrocarbons, without spending a fortune on Capex, and that is what we have designed.

In the recent years there has been an increased focus on environmental impacts from the oil and as industry. How will your technology meet these new demands?
JS. We have designed a new type of subsea equipment which is built with less steel that requires less machining, welding and painting. We have also focused on environmental impact at the design stage, and since our equipment is significantly smaller and lighter than conventional subsea structures the environmental cost for moving and installing is reduced with 50 percent compared to conventional structures. If the subsea equipment is as installation friendly as ours, intervention vessels spend less time offshore, thus reducing gas emissions, and as an extra bonus it saves a lot of installation cost. It is a win/win situation for the oil and gas companies and the environment. In addition to this, we are currently working on a drill cutting re-injection system that reduces the need for costly handling and transportation of this type of waste.

What are the financial benefits of this new technology developed by First Crude Oil?
JS. First of all it will reduce CAPEX spent on a subsea field development with 25 percent and, in the long run, also reduce maintenance costs dramatically. But since many operators are now also looking at developing fields with less production lifetime, we have designed our new subsea production systems to be installed and retrieved numerous times. Our SPS equipment can be placed at one location for three to five years, then be removed and refurbished and put into new service at a new location.And you can even lease it for a certain period and then handle it back to us, saving a lot of operation cost for the operators and owners. We can than re-use the equipment with a new client at a new location. Of course, some of the major safety components have to be replaced, but still, it is a very cost effective field development solution.

Has First Crude Oil received any feedback on these new solutions?
JS. Yes, we have started marketing of this new field development concept in the Asian and Middle East markets and all our clients are very interested to learn more about these low Capex subsea solutions. And we are just finishing our first field development study with this new technology and will shortly issue it to some of our main clients. We expect to launch the first subsea system by the end of 2010.

Jan Strom, who has an engineering degree in Marine Engineering and Electronics, is the Engineering Manager of First Crude Oil Ltd. Strom has been working with subsea engineering offshore and onshore for more than 20 years and was the co-founder of the Norwegian AMEK group.